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Oil and Gas tax changes fall short of what is needed – Colreavy

Deputy Michael Colreavy, Sinn Féin spokesperson on Communications, Energy and Natural Resources has said that the tax changes applied to oil and gas extraction do not go far enough.

Speaking on the issue, Deputy Colreavy said:

“The Finance Bill 2015 applies changes to the tax system of petroleum extraction.

“These changes were announced by the Minister for Communications, Energy and Natural Resources in June 2014.

“The new tax called the Petroleum Production Tax replaces the Profit Resources Rent Tax.

“The changes outlined will see the result in the maximum collectable tax on oil and gas extractions being increased from 40% to 55%.

“However, in May 2012, a report issued by the then Joint Committee on Communications, Natural Resources and Agriculture recommended a major overhaul of Ireland’s tax terms for its offshore oil and gas.

“The committee recommended that the tax for future licences is increased to 40% for small commercial discoveries, 60% for medium commercial discoveries and 80% for very large discoveries.

“When these changes were announced we welcomed that the government had finally recognised that there is a need to review the current tax terms applied to Ireland offshore oil and gas reserves.

“This clearly falls short of what the committee recommended and Ireland still has one of the lowest tax returns from natural resources of any state.

“The corporation tax rate applying to petroleum production will remain at 25%.

“There will be no retrospective action taken on existing oil and gas fields, including the Corrib gas field.

“We welcomed that changes had been made but it falls short of the overhaul that is needed.”